Is competition a bad sign for a new business?

Usually the opposite. Competition proves people pay for this, which is the expensive thing to find out. A category with nobody in it is more often a category nobody wants than one nobody noticed.

The reasoning

What matters is whether you can be different in a way somebody cares about — service, speed, a narrower audience served properly. Being cheaper is the one differentiator anybody can copy in an afternoon.

What most people get wrong

A market that already spends money is easier than a market you have to convince exists. Competition is evidence, not a warning.

Test whether people will pay before building anything. A hundred people saying they like it is worth less than one paying.

An idea is worth almost nothing on its own. What is scarce is somebody who will keep going after the first version does not work, which is every first version.

How an app changes it

If the idea is a shop, the sequence matters: sell first, prove people come back, then build the app. An app before the customers is a cost with nothing to do.